A massive unstaking event has rocked Babylon, a prominent Bitcoin staking protocol, leading to a staggering $1.26 billion worth of BTC being withdrawn and slashing its total value locked (TVL) by 32%.
On April 17, blockchain analytics firm Lookonchain flagged four wallet addresses responsible for unstaking 14,929 BTC from Babylon. One address alone accounted for the lion’s share—13,129 BTC—valued at roughly $1.1 billion based on Bitcoin’s market price of around $84,400.
The exit triggered a sharp decline in Babylon’s TVL, which dropped from $3.97 billion to $2.68 billion, according to DefiLlama data.
While the identities behind the unstaking addresses remain unknown, speculation has spread rapidly within the crypto community. Some users on X suggested the funds could belong to the Chinese government, while others believed it might be part of a strategic portfolio rotation or risk-off move.
Adding fuel to the discussion, decentralized finance platform Lombard Finance acknowledged it was behind the movement. In a public post retweeted by Babylon Labs, Lombard stated it had initiated the BTC withdrawal as part of its transition to a new group of finality providers. The move was deliberately timed to align with the end of Babylon’s Phase 1 Cap 1 on April 24, ensuring users wouldn’t forfeit staking rewards.
Lombard further assured the community that the withdrawn BTC would be restaked once the unbonding phase was complete.
This large-scale activity closely follows Babylon’s April 3 airdrop announcement, where 600 million BABY tokens were allocated to early adopters, including stakers, developers, and NFT holders. That announcement also triggered a smaller wave of withdrawals, with $21 million in BTC unstaked shortly after.
Meanwhile, Bybit recently launched a new BTC staking campaign through its Web3 platform in partnership with Lombard Finance, offering users fresh incentives to explore decentralized finance (DeFi) rewards. The initiative runs from April 11 to May 9.
Source: DeFi Planet / Digpu NewsTex